The year after the Global Biodiversity Framework (GBF) was adopted in 2022, the number of companies reporting on their nature and biodiversity impacts increased by 43%, according to new figures from the CDP. The data shows that water and forest disclosures also increased by 23% and 10%, respectively, from 2022 to 2023.
Viewed by many as the Paris Agreement for nature, the GBF was signed by 195 countries at the 2022 UN biodiversity summit known as COP15 to halt biodiversity loss and restore natural ecosystems around the world.
According to the CDP, the data also shows a 20% increase from 2022 to 2023 in the number of companies (around 1,800 total) assessing the impact of their value chains on biodiversity.
In addition, there was a 24% increase in companies evaluating their water dependencies, contributing to a 22% reduction in corporate water use overall.
Despite these positive trends in reporting, the data reveals what CDP refers to as “blind spots” in corporate understanding and action.
According to the data, less than 10% of companies have assessed their dependency on biodiversity, despite the fact that biodiversity loss is estimated to cost the global economy between $4 trillion and $20 trillion annually.
Additionally, while many companies have identified business risks related to water and forests, only around half of these reported risks include a financial impact figure.
Only a small minority of banks and investors report financing nature-based solutions (17%) or sustainable agriculture efforts (23%).
Meanwhile, the Taskforce on Nature-related Financial Disclosures (TNFD) recently announced that more than 500 companies and financial institutions worldwide, representing more than $6.5 trillion in market capitalization, have committed to begin nature-related corporate reporting, based on the TNFD recommendations, for fiscal years 2024 or 2025.
“The speed of voluntary market adoption over the past year since the release of the TNFD recommendations highlights the growing appreciation among companies and financial institutions across sectors and geographies that nature is a material risk issue for their business and a new source of opportunity and potential competitive advantage,” said David Craig, Co-Chair of the TNFD.
